Covid-19 vaccine: 3 top UK shares I’d buy right now

I’ve been scanning the market for stocks that I think could benefit from the Covid-19 vaccine. Here are three UK shares I’m watching. 

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In the past month, not one but three Covid-19 vaccines have shown themselves to be effective against the virus. I think this is extremely positive for UK shares. As such, I’ve been scanning the market for stocks that I think could benefit from the treatment. Here are just three of the firms I’m watching right now. 

Covid-19 vaccine: 3 top UK shares

Pubs are set to be one of the primary beneficiaries of a vaccine. The hospitality sector has been hit hard by the coronavirus crisis, and unfortunately, many pubs have already closed their doors forever.

However, pubco Fuller Smith & Turner (LSE: FSTA) stands head and shoulders above the competition, in my opinion. The company entered the crisis with a solid balance sheet. Net debt was around £20m compared to property assets of more than £600m. This has helped it weather the crisis. 

According to its recent results, customers were quick to return to the firm’s establishments when they reopened over the summer. I reckon the same will happen after the second lockdown and in the new year.

While one might be able to achieve a higher return owning other UK shares, Fuller’s quick recovery last time and strong balance sheet have convinced me that this business can make it through the crisis in one piece and possibly emerge stronger on the other side. Other operations may not be so lucky. Those with a lot of debt and large rent obligations could struggle if sales do not bounce back and operating costs increase.

Growing oil demand

As the global economy recovers from the pandemic, oil and gas demand is expected to recover. I think this should help push the BP (LSE: BP) share price higher. 

This is one of the worst-performing UK shares in 2020. However, I believe that the worst is now behind the business. The price of oil has risen substantially in recent weeks. BP has also taken an axe to costs, pushing down its cost of production. 

As well as all of the above, the company has committed to invest billions in renewable energy over the next few years. This initiative should help the corporation reduce its dependence on hydrocarbons going forward. 

With a mid-single-digit dividend yield on offer as well, I think it’s possible this company could produce high total returns for my portfolio in the years ahead. 

Global diversification

Cruise ship operator Carnival (LSE: CCL) has suffered more than many other UK shares over the past nine months. Luckily, investors have been happy to support the enterprise. The group has raised billions of dollars in debt and new cash to keep the lights on throughout the crisis. 

With the light starting to show at the end of the tunnel, Carnival can now consider how it’s going to move forward. All indicators suggest customers will return. Bookings have surged since the Covid-19 vaccine news was announced. 

As such, I’d consider buying the stock at current levels. The firm is past the worst. It hasn’t collapsed, and customers are thinking of returning. While it could be some time before activity returns to 2019 levels, Carnival looks cheap compared to history. Like other badly effected UK shares, I think there’s a strong chance the stock could rebound in the short term as investor sentiment improves. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves does not own any share mentioned. The Motley Fool UK has recommended Fuller Smith & Turner. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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